In a letter sent last week to U.S. Department of Education Secretary Arne Duncan, four U.S. Senators urge the ED “to direct federal student loan servicers, debt collectors, and all other third parties” to delay use of the new robocall authority given by the Bipartisan Budget Act of 2015. Two Senators are Democrats (Elizabeth Warren and Edward J. Markey) and two Senators are Republicans (Michael S. Lee and Orrin G. Hatch).
Signed into law by President Obama on November 2, 2015, Section 301 of the Budget Act amended the Telephone Consumer Protection Act (TCPA) to create a new exemption for debt collection robocalls made to cellular and residential telephone numbers. Prior to the amendment, such calls would have been prohibited absent the recipient’s prior express consent. As amended by Section 301, the TCPA now allows such calls to be made without the recipient’s prior express consent if such call, when made to a cellular phone, “is made solely to collect a debt owed to or guaranteed by the United States,” or, when made to a residential line, “is made solely pursuant to the collection of a debt owed to or guaranteed by the United States.”
The Senators assert that the robocall authority should not be used until the ED can “demonstrate with data that the use of this authority will provide net benefits for both student loan borrowers and taxpayers and will not result in potentially abusive debt collection practices.” They also contend that the new robocall authority cannot be used until the FCC issues implementing regulations and that such authority can only be used for calls to student loan borrowers and not to “their relatives or references that may be secondarily responsible for the debt.” In their letter, the Senators ask the ED to tell them by January 11, 2016 whether it agrees with their interpretations of the TCPA amendments.
The Senators’ interpretations do not appear to be supported by Section 301. Section 301 has no explicit effective date. In contrast, other Budget Act sections have explicit effective dates, including one section with an effective date that is tied to the issuance of implementing regulations. While Section 301 directs the FCC, in consultation with the ED, to issue regulations to implement Section 301, it does not provide that that Section 301 is ineffective until such regulations are issued. Also, the rulemaking authority provided by Section 301 only allows the FCC to “restrict or limit the number and duration of calls made to a telephone number assigned to a cellular telephone service to collect a debt owed to or guaranteed by the United States.” Accordingly, such regulations would not impact robocalls to residential telephone numbers.
In addition, nothing in the language of the exemption suggests that it allows robocalls only to a student loan borrower and not to others who are liable for the loan. The exemption’s only limitation is that the robocall must be made “solely to collect a debt owed to or guaranteed by the United States’’ or “solely pursuant to the collection of a debt owed to or guaranteed by the United States.” Finally, the Senators are asking the ED to revisit a policy decision about the benefits of these calls that was made by the Congress in enacting the TCPA amendments and the President in signing them into law.
We will be interested to see whether the CFPB shares the Senators’ interpretations of the robocall exemption in connection with examinations of student loan servicers and debt collectors involved with federal student loans.